To remain competitive in today’s rapidly evolving marketplace, businesses must be nimble, flexible and capable of adapting to external market conditions.
For marketing, this means constantly analysing the efficacy of campaigns and making informed changes by combining data and other analytics to validate or disprove gut-felt hypotheses.
The first step in creating an efficient marketing or customer engagement strategy is to gather and analyse data. Whilst most Australian businesses use some form of data analysis, there are still a surprising number that are not using it to help inform their marketing campaigns. This means they are unable to leverage the insights that data can provide.
The following five tips can help businesses use data analysis effectively so they can thrive in the face of hefty competition:
1. Gather and analyse both qualitative and quantitative data
Much of the data gathered by organisations is still driven by product market-share and entirely focused on new customer acquisition numbers. These metrics are easy to measure, but the number of new customers or accounts is only part of the story. Customers now have instant access to a vast amount of information and can easily shop around for products or services. As a result, having a 360-degree view of new and existing customers is more important than ever.
While a product-centric, market-share-driven marketing approach works for some industries (such as Fast Moving Consumer Goods FMCG), for many businesses, especially those that are service-based, this approach is not sufficient. These organisations need to consider both qualitative and quantitative data to understand the full story.
For example, the mutual sector of the financial services industry has consistently high on-boarding and customer service levels, but its overall market share continues to decline. Quantitative analysis will tell you how many customers are joining or leaving, but only qualitative analysis will uncover the reasons why a high number of new customers do not stick around.
Gathering customer acquisition and satisfaction measurements will provide a fuller customer picture and help shift the focus more towards retention and long-term customer value, not just on-boarding alone.
2. Have a control group
To measure the efficacy of proactive marketing activities, you must first know what the effect of doing nothing would have been.
Just as medical tests use placebo groups, marketers should use control groups to measure and verify results. Control groups give organisations a baseline of how people behave without any marketing intervention. For example, if you are targeting the efficacy of a campaign on females, ages 25 to 40 years-old, then a proportion of your target audience should be randomly selected, set aside and not contacted. At the end of the campaign, measure results against the control group to verify the campaign was the reason for engagement as opposed to external factors. Positive results across a campaign are not necessarily an indication of a success if the control group also behaved in the same way.
3. Analyse your data more efficiently
This might seem obvious, but many companies gather data and don’t use it to its full potential.
a) Use your data to bundle products and offers that truly add value. For example, if a customer usually comes into a store twice a week, but hasn’t done so for two weeks, this could mean they are unhappy or simply unable to visit the store. Using historical data could uncover the problem and let you offer solutions, such as home delivery.
b) Minimise customer loss. A full 360-degree data view helps avoid customer attrition. This type of attrition can occur when the business demonstrates that they do not understand customers. For example, trying to upsell to someone who recently had an unresolved complaint would likely result in that customer being lost. To obtain a useful 360-degree customer view, you need data, insight and process automation that lets you act on the insight at the right time.
4. Continually run and refine analysis
With the advent of customer impact analysis software, qualitative and quantitative data analysis can now run continuously according to set rules and segmentations. Process parameters can be refined regularly to get the most useful insights from the data to inform your marketing strategies.
5. Remember customers like to be well-informed too
Often data gathered cannot only useful for your company, it can be helpful to your customers too. The reason is customers like to see insights that are specifically relevant to them. For example, they like to know how they compare to other customers in their area. Electricity companies now provide their customers with data so they can understand how their usage compares to the average. When combined with advice on how to reduce electricity usage, this information enables deeper engagement with customers and elevates their experience. This can be expanded further to create a two-way dialogue, which in turn is used to harvest data to improve services.
With big data and modern analytics technology, innovative organisations can now continuously “test and learn” by building qualitative feedback at the individual customer-level and quantitatively refine its customer-centric strategy and execution. However, many businesses fail to complete the “refine” step. To get the most out of your data, you must consider both quantitative and qualitative data and understand how to get the best from both sets. This can help organisations harness the power of data to make their marketing campaigns more effective and position their businesses for future growth.
About the Author
By Andy Moy, Director of Customer Engagement Management, ANZ at Pitney Bowes Inc.